Case Digest (G.R. No. L-48278)
Facts:
On December 16, 1959, private respondents Damaso R. Cruz and Monica Andres (the Cruzes) secured a loan of P3,600.00 from petitioners Antonio and Aurora Tambunting (the Tambuntings), who operated a lending and pawnshop business under the name "Agencia de Tambunting," with Jose P. Tambunting serving as the manager. The loan was documented through a promissory note, which stipulated a repayment period of four months and an interest rate of 12% per annum. To guarantee the loan, the Cruzes executed a Deed of Real Estate Mortgage over a parcel of land they owned, as indicated by Transfer Certificate of Title No. 59433 from the Register of Deeds of Rizal.
When the Cruzes failed to fulfill their loan obligation by the due date, the Tambuntings initiated an extrajudicial foreclosure of the mortgage on March 17, 1967. A notice of sheriff's sale was posted, announcing an auction scheduled for August 2, 1967. This notice was published in the Rizal Chronicle on July 12, 1...
Case Digest (G.R. No. L-48278)
Facts:
1. Loan and Mortgage Agreement:
- On 16 December 1959, private respondents, spouses Damaso R. Cruz and Monica Andres (the Cruzes), obtained a loan of P3,600.00 from petitioners, spouses Antonio and Aurora Tambunting (the Tambuntings), who operated a lending-pawnshop business under the name "Agencia de Tambunting."
- The loan was secured by a Deed of Real Estate Mortgage over a parcel of land owned by the Cruzes, covered by Transfer Certificate of Title No. 59433.
2. Default and Foreclosure Proceedings:
- The Cruzes failed to pay the loan upon maturity. On 17 March 1967, the Tambuntings filed a petition for extrajudicial foreclosure of the mortgage.
- A notice of sheriff's sale was published in the Rizal Chronicle on 12, 19, and 26 July 1967, with the auction scheduled for 2 August 1967.
3. Legal Action by the Cruzes:
- On 2 August 1967, the Cruzes filed a case for annulment of the mortgage and damages, seeking a writ of preliminary injunction to stop the foreclosure sale. The court issued a temporary restraining order, halting the sale.
- After the restraining order was lifted, the sale was rescheduled to 20 October 1967, with re-publication of the notice. However, the sale was again postponed due to a motion for reconsideration filed by the Cruzes.
4. Final Foreclosure Sale:
- On 26 January 1968, the property was sold at public auction to the Tambuntings for P9,400.00, despite the Cruzes' objections regarding non-compliance with notice requirements.
- Aurora Tambunting later consolidated the title in her name and transferred the property to Tambunting Realty Corporation.
5. Trial Court Decision:
- On 2 September 1974, the Court of First Instance of Rizal ruled that the mortgage and promissory note were valid but declared the foreclosure sale null and void due to non-compliance with legal requirements. The court ordered the Cruzes to pay the Tambuntings the loan amount plus interest and attorney's fees.
6. Appeal to the Court of Appeals:
- The Court of Appeals affirmed the trial court's decision, ruling that the foreclosure sale was invalid due to non-compliance with the posting and publication requirements under Act No. 3135, as amended by Act No. 4118.
- The appellate court also granted the Cruzes' petition for an accounting of rentals received by the Tambuntings during the pendency of the case.
Issue:
Validity of the Foreclosure Sale:
- Whether the foreclosure sale on 26 January 1968 was valid despite alleged non-compliance with the posting and publication requirements under Act No. 3135.
Accounting of Fruits and Application of Rentals:
- Whether the Court of Appeals erred in granting the Cruzes' petition for an accounting of rentals received by the Tambuntings during the pendency of the case.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Conclusion:
The Supreme Court denied the petition and affirmed the decision and resolution of the Court of Appeals. The foreclosure sale was declared null and void due to non-compliance with statutory requirements, and the Cruzes were entitled to an accounting of the rentals received by the Tambuntings during the pendency of the case.